Depression is the most common psychiatric morbidity in youth with insulin-dependent diabetes mellitus (IDDM), is often protracted, and is a risk factor for medical complications. There are no psychosocial interventions of proven effectiveness for this mental disorder in juveniles with IDDM. The goals of this project are to (1) modify and existing manual for treatment of depression in childhood called Contextual Psychotherapy to accommodate the IDDM; (2) test and refine the resultant manual with depressed diabetic youths; (3) conduct a treatment development study with depressed 8 to 16 year-old diabetic youths; (4) arrive at a final psychotherapy protocol suitable for depressed youths with IDDM.